Tuesday, February 22, 2011

Following a big election win, the GOP is claiming a big mandate from “the American people” to dramatically cut back government spending. The continuing resolution (which would keep the government from shutting down on March 4) that the House has been working on will cut many tens of billions of dollars from a wide range of domestic programs that are subject to the annual appropriations budget. Although most of these cuts are not expected to survive in the Senate, the House bill shows that the country is facing an inevitable showdown over spending priorities. The House will continue to do everything it can to cut back as much as possible, while Senate Democrats and President Obama are more inclined to offer a more gradual version of spending cuts that will attempt to preserve funding for their priorities. (The President’s proposed budget for the new fiscal year, which begins on October 1, would preserve funding for health reform implementation, while the House GOP’s continuing resolution would defund most of it.)

But as long as the GOP is unwilling to consider tax increases, and Democrats are unwilling to put Medicare, Medicaid and Social Security on the table, neither party is going to be able to enact a credible plan to dig the country out of its growing debt burden. The Wall Street Journalreports that a bipartisan group of Senators is working on a plan, based on President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform, which would include “a tax code overhaul; discretionary spending cuts; changes to Medicare, Medicaid and other entitlements; and changes to Social Security.”

The effort to reduce government spending may run into a big obstacle, though: the American people themselves. The GOP, naturally, believes that its huge gains in the mid-term elections and the rise of the Tea Party show that “the American people” are four-square behind the effort to slash spending. In that sense, they are very much like President Obama and the Democrats were after their huge win in the 2008 elections: they felt that the same “American people” gave them a mandate to reform health care and increase spending on a whole range of priorities. The Democrats later found that the mandate from the American people, especially on health reform, was a lot softer than they expected, with polls today showing that the public remains pretty much evenly divided between wanting to repeal the health reform law or keep or expand it.

The reality is that the American people are a confused and contradictory lot. They are all for cutting government spending - as long as it doesn’t reduce spending on the programs that they care about, which is just about everything. Just like they were all for health care reform, as long as they don’t have to pay any more for it or make major changes in how they get coverage.

Don’t take my word for it. A new public opinion survey from the well-respected Pew Research Center finds how conflicted the public is about cuts in government spending:

“Across a range of federal programs, Americans are no longer calling for increased spending, as they have for many years” the researchers report. “For the most part, however, there is not a great deal of support for cutting spending, though in a few cases support for reductions has grown noticeably. The survey also shows that the public is reluctant to cut spending -- or raise taxes -- to balance state budgets.”

Here’s more from the survey:

Only one in five Americans cited the deficit as their top economic concern. Even Republicans are split: about as many Republicans cite the job situation (39%) as the budget deficit (36%) as their chief economic concern.

And this: “the public’s taste for cuts in federal government spending on specific programs remains limited. More want to see spending increased than decreased on 15 of 18 issues tested. The only area where a plurality favors decreased spending is on economic assistance to needy people around the world; even here, just under half (45%) support spending cuts, while 21% say spending should be increased and 29% want to keep spending the same. In two other areas – military defense and assistance for the unemployed – the numbers favoring cutbacks are roughly equal to the numbers favoring increases.”

The public’s lack of appetite for cuts includes government spending on health care. 71% of Americans want the government to keep spending the same amount or more on health care, and only 24% want to decrease it. 83% want the government to increase spending on Medicare or keep it the same; only 12% want to reduce it.

The challenge, as I see it, is that neither the Republicans nor the Democrats have the mandate from the American people that they think they have. The GOP’s tea-party base wants to eviscerate much of what the federal government does, but that is not where the American people are, or even most Republicans. The Democrats may think that the public is on their side, but the Pew Research also shows that the public’s appetite for more spending is waning. “For 12 of the 13 issues where 2009 trends are available, either support for increased spending has fallen or support for spending cuts has grown (or both)” according to the Pew Center.

Public opinion notwithstanding, no serious economist disagrees that the United States needs to get a handle on its deficit spending and debt. The only real debate is how quickly, and what combination and degree of spending cuts (and in what areas) and tax increases (and to whom) will get us there. But until the Democrats or Republicans—or better yet, both parties together—are able to persuade “the American people” that things have to change, meaning that some will have to pay more to government and some will have to get less from it, the American people will remain a confused and contradictory lot. And politicians from both parties who claim a mandate to grow or shrink government will do so at their own peril.

Today’s questions: What do you make of the public’s seemingly conflicting views on increasing or reducing government spending? And what does this mean for the chances of getting bipartisan agreement (the only way it can happen) on deficit reduction?

Tuesday, February 15, 2011

Budgets are ultimately about choices: how individuals, families, companies, communities, and government choose to spend their limited resources.When the Republicans gained control of the House of Representatives in the November elections, there was little doubt that it would lead to a confrontation with President Obama and Senate Democrats over the choices that the U.S. government must make to begin to live within its resources.(Although neither party has produced a credible plan to balance the budget.)

This week shows how far apart the sides are in the choices they would make.The GOP-controlled House will be voting this week on a continuing resolution to keep the government open for business when current funding expires on March 4, but it is demanding extraordinarily deep cuts in spending on discretionary (non-entitlement) programs in return, setting up an almost certain confrontation with President Obama and Senate Democrats.

The budget process isn’t the easiest thing to explain, but I’ll try.

The immediate confrontation is the result of the failure of the Democratic-controlled 111th Congress to pass a budget for the current fiscal year, which runs from October 1 of last year through September 30 of 2011.Instead, it funded the government through a series of temporary continuing resolutions. The current one runs through March 4.Usually, a continuing resolution (CR) continues funding for federal agencies at current budget levels, with some modest adjustments.

The GOP leadership of the new 112th Congress, though, looks at the need for a new CR as the vehicle to implement its pledge to cut $100 billion out of the discretionary budget. The CR that the GOP leadership released late last week would cut tens of billions of dollars out of spending on a wide range of domestic programs, and completely terminate dozens of them.Included are enormous spending cuts in health programs, including several that ACP believes will exacerbate the existing shortage of primary care physicians.

Health professions training programs (scholarships, loan forgiveness):the CR would cut $145.119 million (29.1%) below FY2010 enacted levels, which represents a $386.1 million (53.2%) cut from the President’s FY2011 request.Included in the cut is the only federal program (Title VII) that provides grants to institutions to establish or expand primary care training and education, including residency or internship programs in primary care specialties for medical students, interns, residents, or practicing physicians.

National Health Services Corps (NHSC):the CR eliminates $141.925 million in discretionary funding while maintaining $290 million in mandatory funding, which would mean that some 2,365 health professionals would no longer be able to receive NHSC funding.

Community health centers (CHC):$1 billion cut from FY2010 enacted levels; as a result, CHCs will lose the capacity to serve 3.3 million current patients in the next few months and over 11 million patients over the next year.

The CR would cut medical and health services research.The National Institutes of Health would be cut by $1,629.3 million (5.3%) from FY2010 enacted levels and $1,569.6 million (5.1%) from the President’s proposed FY2011 budget and the Agency for Healthcare Research and Quality would be cut $25 million (6.3%) from FY 2010 enacted levels and $39 million (9.4%) from the President’s FY2011 budget request.And, the CR begins to"defund" implementation of the Affordable Care Act by completely eliminating funding for staff salaries in the White House Office of Health Reform and for the IRS to hire staff to enforce the individual insurance mandate.

The House is expected t approve the CR this week, and then the Democratic-controlled Senate will have to pass its own version of the CR. If the House and Senate can't agree with each other, and with the President, the government would begin to shut down when the current CR expires, and at that point, it is anyone's guess which side would blink.

The battle over the CR is only the first of a series of fights over spending:

Debt ceiling legislation: Congress will need to vote on legislation to lift the debt ceiling (which allows the federal government to borrow more money) in March or early April. The GOP will be using the threat of not voting for the debt ceiling to try to force the administration and the Senate to accept even deeper cuts in spending, potentially including Medicare and Medicaid and defunding of the ACA. Like other legislation, both the House and Senate have to agree, and the President can veto a debt ceiling bill. But this takes time, the stakes (if agreement isn't reached) are not only a shutdown of the government, but the United States defaulting on its obligation to investors who hold U.S. treasury bonds.

Fiscal year 2012 budget: The House and Senate also must pass a budget for the new fiscal year that begins on October 1. The President's budget, which was released yesterday, outlines his proposed spending blueprint for the new fiscal year. It addresses not only discretionary spending, but mandatory programs (Medicare and Medicaid). The House GOP leadership will be seeking much deeper cuts than the President will propose.I will have more to say about the President’s budget in a future post.

Medicare Sustainable Growth Rate: The SGR will be another vehicle for showdown on spending, since physicians will face another 28% cut on 1/1/2012 if Congress doesn't pass an SGR fix. The GOP will try to use the SGR to defund major parts of the Affordable Care Act, likely splitting the medical profession in the process. President Obama's budget includes $62 billion to replace the 2012 and 2013 SGR cuts with a freeze in current payments, paid for by cuts in other parts of Medicare and increased fraud and abuse enforcement.

One of the challenges is that even if Speaker Boehner, Majority Leader Reid, and Minority leader McConnell can reach agreements with Senate Democrats and the White House on spending, it isn't clear that Rep. Boehner can deliver the votes of Tea Party conservative members for any compromise on spending.

Right now, it is impossible to predict who will gain the upper hand in the budget battles.But it is clear that the choices that will be made will have enormous consequences, for the nation’s short-and-longer term solvency, for the millions of people who get help from federal programs, and for our health care system—including whether the federal government will continue to fund programs to help avert a growing shortage of primary care physicians for adults.The problem is that these choices are being driven by legislative deadlines—the March 4 expiration of the current funding for the federal government, the debt ceiling legislation—that will not allow for the public to be informed about or participate in the choices being made. For instance, the continuing resolution to be voted on this week will cut $100 billion or more out of federal programs—yet not one hearing has been held to get public input on the choices being made!I expect that very few Americans even know what is in the continuing resolution (the same charge, ironically, that the GOP frequently made about the Affordable Care Act).

Deficit reduction will only be successful if the public buys into the hard choices that must be made, and that can’t happen if Congress doesn’t allow a full debate on the choices being made on their behalf.

Today’s questions: What is your reaction to the budget battle?And how should Congress and President Obama ensure that the public is informed and participates in the choices being made?

Friday, February 11, 2011

After voting to repeal the health reform law, the House of Representatives passed a resolution to provide direction on the “replace” part of “repeal and replace.” The resolution instructed the health committees to develop legislation to replace the health care law with “incentives to encourage personal responsibility for health care coverage and costs” among other GOP ideas, like selling insurance across state lines.

Why in heaven’s name, then, are some influential House Republicans trying to end support for research to help people “to take more personal responsibility” for their own medical care?

Rep. Thaddeus McCotter (R-MI) has introduced H.R. 556, which describes itself as the “Preserving Patients Choice Act” even though in my mind the bill actually would reduce the ability of patients to choose wisely among different treatments. The bill would repeal funding for comparative effectiveness research (CER) conducted by the new Patient-Centered Outcomes Research Institute (PCORI) and by the Agency for Health Care Research and Quality. Rep. McCotter, the immediate past-chairman of the House Republican Policy Committee, says that “H.R. 556 would repeal . . . the Patient-Centered Outcomes Research Institute, an entity with the potential to inject the federal government into the doctor-patient relationship.”

But the PCORI was set up to help patients and their doctors make their own choices, not to impose decisions on them. This is how ACP described the PCORI in a statement submitted yesterday to a House Ways and Means committee hearing:

“Each day, in the privacy of the examination room, patients are treated for conditions for which there are numerous treatment options. . . The limited availability of valid data to supplement the physician’s clinical experience and professional knowledge – data that compare the clinical effectiveness of different treatments for the same condition – makes it difficult to ensure that an effective treatment choice is made, one that meets the unique needs and preferences of the patient. The ACA helps to address this issue by establishing an independent, non-profit, tax exempt corporation, known as the “Patient-Centered Outcomes Research Institute” to provide comparative effectiveness information to clinicians and patients. The law also funds the development of shared decision making tools to translate the results of the research into information that is understandable by patients . . . In this way, Medicare patients and their physicians will be empowered to make informed, and therefore improved, health decisions based on the best and most recent evidence of clinical effectiveness.”

Dr. Fred Ralston, ACP’s president, in remarks made at ACP’s State of the Nation’s Health Care briefing, put the value of such research in words that any physician or patient would understand:

“I look at rational use of resources on a personal level as obtaining and using the proper information on diagnostic and treatment options that I would want used on my family. If a test or treatment is shown to be superior to other options on the basis of safety, outcomes, and/or cost it is what I would want my mother, my wife or my sons to receive. We need unbiased research to make sure that physicians and patients have access to the best treatment options.”

The logic of comparative effectiveness research is simple: if patients and physicians have more information about the effectiveness of different treatments, they will be more likely to choose the ones that will work best them. An article in the current issue of the Annals of Internal Medicine notes that people often know more about consumer products than their own health care:

“The purpose of CER is to help patients, providers, and policymakers make more informed decisions about health care. As some observers have commented, consumers often know more about the pros, cons, and costs of televisions, cars, and appliances than they do about health care interventions. If CER also assesses utilization and costs, it can further help provide a foundation for cost-effectiveness analysis.”

This is not to say that the science of doing comparative effectiveness research is simple – it’s not – but the challenges involved in conducting such research speaks to the need to ensure stable and sufficient funding.

Fiscal conservatives, of all people, should embrace giving doctors and patients the information needed to “encourage personal responsibility for health care coverage and costs.” Providing patients with the results of CER could help drive down costs, by reducing some of the estimated $700 billion that the United States spends each year on ineffective care, while resulting in better outcomes for individual patients and the U.S. population.

In the absence of providing patients with information on comparative effectiveness, it is more likely that someone else – the government, the insurance company, or even a well-meaning but misinformed family member – will make treatment decisions for them.

In the absence of information on comparative effectiveness from trusted and independent scientists, it is more likely that patients will be influenced by slick industry-fund, direct-to-consumer ads for prescription drugs or motorized wheelchairs to seek treatments that they really don’t need and won’t help them, adding billions to the cost of health care.

And in the absence of information on comparative effectiveness, it is more likely that patients will be subjected to harmful and unnecessary tests and treatments.

Patients and physicians alike should urge Congress to preserve the funding for research to help people make more informed choices about their own health care, and remind conservative legislators in particular that such research will “encourage personal responsibility for health care coverage and costs”—an idea the GOP has said it intends to champion.

Today’s question: What is your reaction to the effort by some legislators to eliminate funding for comparative effectiveness research, which is intended to help people take personal responsibility for their care?

Monday, February 7, 2011

Maggie Mahar asks this provocative question in a recent Health Beat posting. She posits that the $27 billion in incentives for physicians and hospitals in the American Recovery and Reinvestment Act (ARRA a.k.a. the stimulus bill) is creating a worrisome “bubble” in the market for EHRs. She writes:

“I am hardly an IT expert. But I have spent enough years observing markets—stock markets, real estate markets, and most recently, our health care market—to recognize a big, bright Bubble when I see one. Eager to take advantage of fat federal subsidies, too many buyers, with too little information, are scrambling to purchase health IT. And, as is always the case, too many sellers are all too eager to satisfy the buyer’s desire to part with his money. But many vendors won’t have the resources to follow through on the services and training that they promise. Or, they will be too busy chasing the next customer to meet their commitments. More importantly, the majority of HIT vendors cannot fathom what it’s like to work in an ER or a busy primary care office, and so they cannot begin to grasp precisely what doctors and nurses need.”

The federal subsidies that she is referring to are incentive payments – up to $44,000 under Medicare or $63,750 under Medicaid – that physicians can receive over the next five years for adopting EHRs and meeting the federal government’s “meaningful use” rules. After five years, physicians who do not meet the requirements will be subject to Medicare pay cuts.

The question of whether the government should cut-off the incentive payments is not merely an academic one. House Republicans have introduced legislation to eliminate all “unused” stimulus dollars, which presumably would include the EHR incentive program since those funds have only started to be paid out to physicians and hospitals. (The Senate would have to go along, though, and President Obama likely would veto any cut-off.)

Mahar ends up deciding that the government should not eliminate the incentive payments because “it would be too hard to get that money back, and ultimately health care providers will need subsidies in order to purchase this much-needed technology. . .That said, I definitely would like to see the process of adopting HIT slow and perhaps the House [GOP] bill will generate a conversation about the mad rush to fund EHRs.”

I understand Ms. Mahar’s concern about the rush by EHR vendors to corner market share while the stimulus funds are available, and the pressure that this places on physicians to make a decision on acquiring or upgrading EHRs to qualify for the incentives. But, as she recognizes, pulling the plug out entirely on the incentive funding would be a big step backwards. “What is the alternative?” said one of ACP’s own staff experts on health information technology when I asked his reaction to the calls to eliminate the incentive program. He added “Our current paper system is more broken and more dangerous than the emerging health IT systems on their worst days.”

Good point. And it’s not like the goal of universal adoption of EHRs is a new one. Giving everyone access to electronic health records within 10 years was first set by a Republican president, George W. Bush, six years ago in his State of the Union address to Congress.

It is widely recognized that the costs to clinicians is a principal barrier, one that the ARRA incentive program is designed to help overcome. The possibility that the incentive program could be eliminated will have a chilling effect on physicians who are contemplating buying or upgrading their EHRs. I addressed this in my remarks at ACP’s briefing last week on the state of the nation’s health care, noting that, “The threat that Congress might cancel the incentive program will discourage physicians from moving forward on health information technology investments, and could pull the rug out on those who have already invested tens of thousands of dollars in the expectation that they will qualify for the incentive payments.”

In my mind, the government offered physicians a quid pro quo, invest in EHRs for meaningful use and we’ll help offset your costs. Reneging on that promise now would be harmful and unfair to physicians who are meeting their end of the bargain, and harmful to patients by setting back for many more years the goal set by President Bush that we’d all have access to electronic health records by 2015.

Today’s questions: What do you think about the possibility that Congress could cut off the ARRA incentives to doctors for electronic health records? What impact would this have on your decisions?

Wednesday, February 2, 2011

A Florida’s judge’s ruling that the Affordable Care Act (ACA) is unconstitutional doesn’t resolve the underlying constitutional issue (which will ultimately have to be decided by the U.S. Supreme Court) but it has introduced new uncertainty for the $2.3 trillion health care industry, and emboldened the law’s critics to push even harder for repeal (not that they weren’t trying already).

The Wall Street Journal’shealth blog reports that “states and companies that are supposed to be implementing the law trying to figure out what to do next. The WSJ reports that the 26 states that are parties to the suit are considering whether to ask the Supreme Court to take up the case now, before it has fully wended its way through the legal system. The New York Times quotes the governor of Florida as saying that until the fate of the law is clear, ‘we’re not going to spend a lot of time and money’ to implement it. Other states, even if part of the suit, will move ahead, the NYT says.” The WSJ also reports that most health care companies plan to “stay the course” and continue to plan for the law’s implementation. Meanwhile, the Obama administration says that the judge’s ruling will have no effect on the implementation of the law or the requirement that states (including those who brought the suit) comply with its mandates and claims that most constitutional experts agree with the administration.

Now, I am not a lawyer, so I don’t have any expertise on the legal arguments over the ACA’s constitutionality. For those of you who want to hear more about the constitutional questions from people who might actually know what they are talking about, I recommend this Health Care Blog post from attorney Mark Hall, a critic of the Florida judge’s ruling. He notes that “At least half of the relevant part of the opinion is devoted to discussing what Hamilton, Madison, Jefferson and other Founding Fathers would have thought about the individual mandate” (Judge Vinson concluded that they would not have approved of it) but “the same Founders wrote a Constitution that allowed the federal government to take property from unwilling sellers and passive owners, when needed to construct highways, bridges and canals.” The Washington Post’s Ezra Klein – a supporter of the Affordable Care Act – has posted an excellent overview of what legal experts are saying about the ruling, pro and con, including a link to a posting that argues Judge Vinson ruled correctly.

What I am qualified to talk about is the potential impact of the ruling, especially in states that decide that they no longer need to take the steps needed to set up the health exchanges. If the Affordable Care Act, in whole or in part, is later upheld by the Supreme Court, say a year from now, the states that made the decision to forgo taking steps to comply with the law’s requirements, in the hope that it would all go away, will be at a serious disadvantage. The ACA requires that states have established the framework for the health exchanges by January 1, 2013, or the federal government can step in and run them. States that have been planning all along for the implementation will be in a much better position than those that did not. The irony, then, is that the states that stop their efforts now to set up the exchanges, based on Judge Vinson’s ruling may be inviting a federal “government-run” take-over of their exchanges! Sure, their gamble could pay off (at least in a political sense) if the Supreme Court decides the ACA—or perhaps more likely, just the individual insurance requirement—is unconstitutional, but that is a pretty big gamble to take for their residents. Meanwhile, states that moved forward, despite the legal uncertainty, will be in a much stronger position to provide affordable coverage to their residents without opening the door for the federal government to run things.

But the greatest risk is to most of the 32 million people who will get health insurance under the Affordable Care Act but now could find it slip away if the Supreme Court finds the ACA to be unconstitutional, or if the court invalidates the principal mechanism to get people covered (the requirement that everyone participate in the insurance pool, or pay a small fine). I have yet to see a proposal from critics of the ACA that would get everyone covered without some mechanism to bring everyone into the system.

Instead of an individual mandate, you could automatically enroll everyone in a public program like Medicare or Medicaid, which will almost certainly pass constitutional muster because it is established law and precedent that people are required to participate in Medicare Part A and Social Security. It is precisely to avoid such an outcome that the individual mandate was originally proposed by conservative theorists like the Heritage Foundation!

But if the critics of the ACA now don’t want to automatically enroll people in a public program, or require that they participate in private insurance as proposed in the ACA, how then would they ensure that everyone has affordable health insurance coverage? Sorry, folks, selling insurance across state lines and offering more health savings accounts isn’t going to do it—such approaches would cover at most three million people who now lack health insurance, according to the CBO.

I don’t know how the Supreme Court will answer the constitutional question. But I do know that if it is found to be unconstitutional, the United States will have to find another way to bring everyone into the pool (Medicare for all?). Or accept that the United States, still the richest country in the world, has decided instead to allow tens of millions of its legal residents to go without health insurance, knowing that many will live sicker and die younger as a result.

Today’s questions: If you don’t support the individual insurance requirement and/or believe it is unconstitutional, how would you propose that the U.S. ensure that all legal residents have access to affordable health insurance? Or do you think it would be okay to leave tens of millions without health insurance?